TUC Budget for green growth

Austerity has failed. The UK has experienced the second slowest export growth of all G7 countries since 2010. Yet Budget 2013 is a vital opportunity for the Chancellor to reset the governments sights, boost growth through targeted green infrastructure projects and recommit to green manufacturing with a Carbon Target for its Energy Bill. These signals should all help strengthen the green industries and services, whose exports provide the one bright spot in an economy that has grown just 1.1% since Budget 2010. So what, exactly, is the TUC’s green Budget prescription ?

The TUC’s high level points in Budget 2013 call for “an end to the Government’s misguided austerity programme and replace it with a programme to create a modern, efficient economy, based on investment in sustainable industries and high quality public services, which provide decent, well-paid jobs.” We focus on five key issues in the green pages of our Budget report:

Set a carbon reduction target for the Energy Bill in line with the advice from the independent Committee on Climate Change.

Release the £1bn carbon capture and storage (CCS) demonstration fund this year, to get four projects underway with no further delay.

Back our core industries by extending the £250m support package for energy intensive manufacturers like steel, cement, chemcicals and ceramics onward from 2015 (when it expires) to at least 2020.

Commit to support an industrial strategy for energy intensive industries, backed by new long term resources for investment funding and innovative technology development.

Set aside the planned “dash for gas”, and set out the government’s long term expectations to 2030 for renewable energy, new nuclear and carbon capture technology in the energy mix, to ensure that supply chain investors have long-term and stable volume certainty of work.

The UK’s track record of developing new supply chains is not encouraging:

Wind turbine manufacture: Of the 4,000 wind turbines now installed and operating in the UK few, if any, were manufactured in the UK. Mike Rolls of Siemens will no doubt touch on this thorny issue at the TUC’s Green Growth seminar on 18 April.

Solar power: In early 2012, changes to the solar power tariffs caused supply chain “boom and bust”. No-one who installed solar panels had any worry about receiving the price they were promised for the next 25 years. But while those who developed businesses in the supply chain grew, they were subsequently cut down as the tariff was curtailed.

Carbon capture and storage (CCS) technology has stalled badly. CCS is an essential part of the UK’s energy decarbonisation strategy to 2030 and beyond. We are far from capturing carbon emissions from coal and gas power stations and heavy industry. It now appears that just £200m, rather than £1bn, has been set aside in this Parliamentfor the supposed £1bn CCS competition.

Unfortunately, Treasury contributions to energy policy are adding to uncertainty. In Autumn Statement 2012, the Chancellor proposed far more ‘unabated’ gas in our power supply through to 2030 than the Committee on Climate Change advises. This confuses investors. Leading wind turbine manufacturers would announce new investment if the government were to signal a long term future for renewables, especially wind, in the energy mix well beyond 2020. Our five green proposals will help bring forward a range of key, job rich projects.

Written by Philip Pearson

Philip is a former Senior Policy Officer in the TUC’s Economic & Social Affairs Department, working on issues around climate change, energy and transport.